In the case of immovable property, mandatory registration of property purchase and sale documents are essential ensuring proof of ownership, fraud prevention and assurance of title.
Under The Indian Registration Act, there is legislation for property registration in India known as the law of registration of documents that makes it a mandatory requirement to register key documents for the recording of evidence, fraud prevention and assured title transfer.
Property Documents Necessitating Mandatory Registration
Registration of property or property registration in India in accordance with Section 17 of the Registration Act, 1908, is mandatory in case of transactions involving immovable property sale for an amount in excess of Rs. 100. What this essentially means is that all immovable property sale transactions must be registered since a mere Rs. 100 cannot possibly be the purchase price of immovable property. Furthermore, a gift of immovable property, as well as lease for a period in excess of 12 months are essentially transactions that require registration.
In special circumstances, if any of the parties to the transaction is unable to be physically present at the sub registrar's office, then, in that case, any of its officers may be deputed by the sub-registrar for acceptance of the registration documents at the buyer’s residence. Included in ‘immovable property’ are land, buildings and any attached rights to these classes of properties.
Procedure and Documents Required for Registration of Property
As registration of property documents are mandatory it's worth knowing what the procedure for registration of property entails. Firstly, the documents have to be submitted to the office of the Sub-Registrar of Assurances within the jurisdiction of the location of the transferrable property by the property lawyer.
Thereafter both the authorized signatories of the seller and the purchaser, need to be physically present with their proof of identities including Aadhar card, PAN card or any other government authority issued ID proof along with two witnesses, for the purpose of registration of property documents.
All designated authorized signatories ought to produce the power of authority if in case they are representing someone on their behalf. If however, in the case of a company the company is one of the parties in the agreement, the company representatives ought to have all necessary documents with them including the letter of authority, and along with that a copy of the company board’s resolution granting authority to execute the registration.
The designated authorized signatory ought to show the property card to the sub-registrar and in addition to that all original documents and proof that stamp duty has indeed been paid. Prior to registration of property documents, verification would be done by the sub-registrar as to whether or not the required stamp duty for the property has been paid, according to the ready reckoner for stamp duty. Any deficit in the stamp duty would result in the registrar declining registration of property documents.
Time Limit and Fees to be Paid for Property Registration
All documents that need mandatory registration ought to be presented by the property lawyer no later than 4 months from their execution date along with the prescribed fee. In the case of expiry of the time limit, an application can be made to the sub-registrar to condone the delay, and that with an extension of time of another 4 months the registration of property documents would be submitted to the sub-registrar within that time. The registrar may consent to register documents that missed the registration deadline for a hefty fine of up to ten times the actual registration fee. For the registration of property documents, the fee is 1% of the property’s value, capped at Rs 30,000.
Previously, presenting registration of property documents for registration of property would result in returning the documents to the sender after six months. Nonetheless, with the sub registrar's offices being computerized, the documents with the registration number and proof that the registrar has indeed completed the registration are first scanned and then returned to the sender on the very same day.
Consequences of Non-registration of Property
If the property purchase agreement remains unregistered then it could be very risky for the buyer of the property. Since it’s mandatory for all documents to be registered but if they remain unregistered then those unregistered documents cannot be presented as proof in a lawsuit.
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